Including tips how to make sure that your KPI's have added value for your organization.
After winning the VCK (now Xelyo) Business Excellence Award with a project that was focused on creating measurable KPI's for "unmeasurable" topics, I became highly interested in the enormous impact KPI's have on people from all different types of organizations. Not only do KPI's have often a "rational" financial impact, bad KPI's can have severe negative "emotional" effects, killing the motivation and self-confidence of people and even leading to an atmosphere of "Quiet Quitting".
What struck me most is the resigned approach of many highly competent workers to just accept what they are ordered to follow, with dramatic consequences on the longer term. In this blogpost, I will share 5 reasons not to leave KPI setting and follow-up completely up to your boss and work constructively with your boss in reaching empowering KPI's.
Reason #1 - Your boss is not necessarily a process expert and will appreciate your help in knowing the reality.
To be able to define really valuable KPI's, it is essential to know the reality of the process which needs to be improved by these specific KPI's. Even if the targets are very high-level or only financial, they still need to be applied in a practical way on a process- or departmental level by somebody who knows the reality. You can use all kind of visualization tools to understand the processes (eg. process mapping), but most importantly is that you have the oversight to explain what your biggest risks and opportunities are on that specific level. With that valuable information, you can finetune the priorities of your department and make sure that your valuable time, motivation and resources are not wasted towards useless "Vanity KPIs" but are going to make your organization stronger for the future.
Reason #2 - The problem will only become bigger on the long-term.
If you keep quiet on short-term to avoid discussions about usefulness of a KPI, feasibility of improvement, KPI not being measurable, lack of resources, .... you will have the exact same problem (but much bigger) once the evaluation moment arrives. If you then explain at evaluation time that your KPI's were unreasonable, you will get the reaction "why didn't you tell me", and this will stir up even more resentment from both sides.
Note: this is especially true in organizations with a high turnover, where your bosses could change faster than your KPI's... In that case you will be forced to explain to a new boss that you also did not support the originally proposed KPI's, immediately losing your credibility...
"Easy short-term choices lead to difficult long-term consequences meanwhile difficult short-term choices lead to easy long-term consequences." – Rory Vaden
Reason #3 - Convincing others against your own beliefs burns mental energy and destroys your reputation.
If you are stuck with unrealistic or useless KPI's, you will still have to deploy them to either your own team, or you have to convince your co-workers to prioritize on actions to help you reach them. Although this is not impossible, it costs enormous amounts of energy to convince other people against your own beliefs and will kill your motivation in the long run. Moreover, if you are seen in your organization as somebody who asks or pushes for useless support, on the longer term this will do damage to your reputation and people will be reluctant to support you in other projects. If everybody in an organization disagrees with certain KPI's, this will damage not individual's reputations but the company culture as a whole.
"It is useless work that darkens the heart" – Ursula K. Le Guin
Reason #4 - Lack of improvement of your daily life
The problem with "Vanity KPI's" is not only that they take away valuable time, resources and motivation, but also that they do not give useful information to actually improve the real processes. With empowering KPI's, you will get enough information to ask for additional resources, do root cause analysis with improvement actions, get better software, get external advice, change your way-of-working for the better, ... You can only do this if you get real, reliable and valuable data about something that makes a difference, even if it is confronting at first to see the weaknesses and improvement points.
Note: Even if you are really stuck with certain pre-defined KPI's, there is still room in discussion with your boss on how to practically apply them, how to follow them up in a useful way and with open communication still make the best of it. If you create this atmosphere, maybe you can influence the target setting for the next year.
"If you always do what you've always done, you'll always get what you've always got" – Henry Ford
Reason #5 - Compliance/Accountability
Certificates and legal obligations are a prerequisite for all types of organizations. A fundamental part of ISO standards is that the appropriate objectives (Quality/Environmental/Safety/Cybersecurity/Energy/...) are established for the management system and are compatible with the context and strategic direction of the organization. If the KPI's that you daily follow are not the same objectives that you are audited on, this is not only a risk for non-compliance, but even more a risk for double work and inefficiency.
The compliance world is also moving fast in integrating Sustainability targets in their scope: having really measurable and useful KPI's for Sustainability is not only needed to convince your customers/shareholders, but also mandatory to fulfil the necessary financial (disclosure) regulations.
You can do this: Empowering KPI's will make a difference for you.
If you want to improve your KPI process to create a positive and lasting impact, measure the "unmeasurable" and convince your management, join the upcoming free KDENZA Webinars below.
In this way you can stop losing energy & time in useless or vanity KPI's or ineffective follow-up, which you know in advance will be demotivating...
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